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    Parsons (PSN): Reassessing Valuation After a Sharp Multi‑Month Share Price Pullback

    Simply Wall St·12/25/2025 13:30:18
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    Parsons (PSN) has quietly slid about 24% over the past month and roughly 21% in the past 3 months, even as revenue and net income continue to grow at mid single digit and double digit clips.

    See our latest analysis for Parsons.

    Zooming out, Parsons latest share price of $62.84 leaves it with a steep year to date share price return of about negative 31 percent. Even so, its three year total shareholder return of roughly 38 percent still signals a solid long term uptrend, with momentum now clearly fading in the near term.

    If Parsons price reset has you rethinking defense exposure, this could be a useful moment to scan other aerospace and defense stocks that might offer a better balance of growth and risk.

    With revenue and earnings still climbing and the stock now trading at a meaningful discount to analyst targets, investors face a critical question: Is Parsons undervalued after this pullback, or is the market already pricing in its future growth?

    Most Popular Narrative Narrative: 25.8% Undervalued

    Compared with Parsons last close at $62.84, the most followed narrative sees fair value materially higher, framing the recent selloff as a potential mispricing.

    Robust funding environment, demonstrated by a record funded backlog (up 14% YoY), strong free cash flow performance, and high win rates on large contracts, combine with secular infrastructure and security demand to underpin both near

    and long-term earnings growth and margin stability, despite investor caution or perceived near-term volatility.

    Read the complete narrative.

    Curious how steady, mid single digit revenue growth and expanding margins can still justify a premium future earnings multiple for a government contractor? The most popular narrative walks through a step by step bridge from today’s profits to a much higher earnings base, then layers on an ambitious yet internally consistent valuation multiple to reach its fair value. Want to see which assumptions do the heavy lifting in that calculation, and how sensitive the upside case is if they change even slightly? Read on to unpack the full earnings and valuation blueprint behind this target.

    Result: Fair Value of $84.64 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, this upside case depends on continued federal funding and smooth acquisition integration; any policy shift or deal misstep could quickly compress margins and growth.

    Find out about the key risks to this Parsons narrative.

    Build Your Own Parsons Narrative

    If this view does not fully match your own or you prefer digging into the numbers yourself, you can build a custom narrative in just minutes: Do it your way.

    A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Parsons.

    Looking for more investment ideas?

    Parsons might be compelling, but you will kick yourself later if you ignore other opportunities Simply Wall St has already filtered for quality, growth, and resilience.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.